Local Meat Production Relies on Farmer-Processor Relationship

Long-term cooperation will be key to keeping up a steady supply of local meat, USDA-ERS report finds.

Jun 25, 2013

Building more meat processing plants won't translate into more local meat unless farmers and processors change how they do business with each other, according to a new USDA Economic Research Service report released last week.

"Farmers say, 'There aren't enough processors.' But how can processors stay open, let alone grow, without enough steady, consistent business to pay their bills?" said Lauren Gwin, a researcher at Oregon State University and lead author of the report.

"'I'll call you when I need you' is convenient in the short term but doesn't give either side any long-term stability or growth," she said.

Long-term cooperation will be key to keeping up a steady supply of local meat, USDA-ERS report finds.

The report, "Local Meat and Poultry Processing: The Importance of Business Commitments for Long-Term Viability," analyzed challenges and innovations in local meat processing.

The report focused on successful processors around the U.S., and evaluated the revenue needed for local processors to stay afloat. Because even a small processing plant must annually process about 450 head of cattle or a combination of other livestock spread out evenly throughout the year, it can be hard to keep plants around.

Gwin and co-author Arion Thiboumery, an Extension associate at Iowa State University, found that one answer to keeping profitability strong among processors is long-term business commitments between the processor and farmers.

"If farmers, on their own or in coordinated groups or brands, commit to bringing a steady supply of livestock, processors could then commit to providing consistent, high-quality services," Gwin said.

Researchers found different examples of these arrangements. For two Midwest processors the researchers studied, a few anchor customers provide most of their revenue. This allows them to process for small farms that bring far fewer animals each year, and only seasonally.

Another cooperative runs the first USDA-inspected mobile slaughter unit, for which all members commit to slaughter dates a year in advance, even for livestock not yet born.

"Without local processors, you simply have no local meat," Thiboumery said. "We even saw examples of farmers investing financially in their processors – helping them add needed equipment or improve services."

And the commitment can go the other way, too, researchers found. Some processors provide technical expertise for existing small processors or facilitate communication and education.

Gwin and Thiboumery also examined efforts around the country where nonprofits, universities, and state and local agencies are working together to provide technical assistance to local processors and their farmer-customers.